IYF vs. FNCL: Concentrated Leaders vs. Broader Sector Exposure

The iShares U.S. Financials ETF (IYF) and Fidelity MSCI Financials Index ETF (FNCL) are two popular options for investors looking to gain exposure to the U.S. financial sector.

While both funds aim to give investors access to banks, insurers, and asset managers, they differ in their portfolio construction and expense ratios.

IYF has a more concentrated portfolio of industry leaders, with over 20% of its assets tied up in Berkshire Hathaway (BRKB) and JPMorgan Chase & Co (JPM). This concentration comes at a cost: IYF's higher expense ratio of 0.38% compared to FNCL's 0.08%.

However, IYF has outpaced FNCL in total returns over the past one-year and five-year periods, with a growth of $1,768 over five years compared to FNCL's $1,664.